Are you one of the millions of Americans who believe the economy, social construct, and financial systems of the country will go back to normal right quick just as soon as the lockdown is lifted and we’re once again free to roam about? Regrettably, that thinking is likely to prove overly optimistic. There are too many ways the coronavirus will change life as we knew it. And as it does, our previous concept of normal is likely to find a place in the history books.
Below is a list of just 15 ways the coronavirus will change life as we knew it. There probably dozens more, but let’s work with these for the moment.
For the record, the purpose of this list isn’t to rain on anybody’s parade. Rather, it’s to help you get prepared for the changes that are likely to result in a whole new paradigm. Will you be ready for the changes as they unfold?
Let’s take a look at a few of them.
1. The World is Likely to Become More Internet-Dependent than Ever
Most of us have already experienced this in daily life. With heavy restrictions on physical mobility, we’ve had to turn to the Internet for everything. That includes surfing to find what stores are open and which restaurants have take-out, following up-to-the-minute news on the pandemic, and making sure the needed widget is available Walmart.
But the shift is even deeper. Where online banking was once a convenient option, it became the only option when the ability to go to the bank disappeared completely.
We’ve even been forced to visit the doctor through telehealth for what were once routine visits. And with the disruptions likely a common aftermath of the coronavirus, we should expect that to become a regular part of the healthcare scene.
Post-coronavirus, it’s not likely we’ll completely reverse our dependence on the Internet. Trends set in motion by a disaster like a pandemic have a way of taking root and becoming part of the new normal.
2. Work-from-home Will Become More Normal
Prior to the pandemic only about 5% of the workforce had a work-at-home arrangement for at least some of the work week. But as the pandemic shutdown expanded, millions more joined the ranks. Several people in my own extended family and circle of friends have become home-based as a result of the lock down.
If anything, the trend is likely to accelerate. Even as the technology for it – mostly the Internet – has grown in the past 20 years, employers have been reluctant to allow workers to home-base, even when it’s technologically possible.
As a result of the pandemic, millions of people have gotten a taste of work-at-home arrangements. It’s likely many will insist on continuing the arrangements even as the lock down is lifted. Meanwhile, employers – eager to slash operating expenses – will increasingly turn to work-at-home arrangements to reduce costly office space.
3. Commercial Office Space Will Take a Dive
It’s pretty much a foregone conclusion that the economy has already sunk into at least a recession. The International Monetary Fund is even predicting an economic crisis akin to the Great Depression. Under such economic conditions, where businesses are unable to expand or even maintain revenue, they’ll turn to cutting expenses – even more aggressively.
The most obvious area to cut will be payroll (see #6 below), but cost-cutting won’t end there.
A major expense for many businesses of all sizes is office space. Some own the buildings they operate in, while many more rent space. Either arrangement leads to long-term financial entanglements that are likely to be unsustainable in a weak and declining economy.
Look for office space (and retail space for that matter) to go dark and empty in the coming months. We had a taste of that during the last recession, but it’s likely to be worse this time.
But the passage of 10 years has definitely created more options for the businesses that remain open. We just discussed the ability to home-based employees, which in and of itself requires far less real estate. The increase in online sales and business activity, along with remote employee capabilities, make businesses less dependent on physical operating space.
Already, there are many online businesses that have little or no physical office space. They remote-base employees, work with outside contractors and vendors, and obtain product from third-party suppliers and manufacturers.
But apart from online businesses, many businesses of all sizes have become more reliant on online sales. With that shift, the decline in office and retail space might happen even faster than any of us can imagine.
4. More People Will Become Self-employed
As the number of jobs declines, millions of people will have no choice but to become self-employed. That’s not a bad thing, because in many respects self-employment is the ultimate career solution. It’s certainly been the case for me as a freelance blog writer, and I suspect necessity will force others to this realization soon enough.
It’s not just the jobs that will disappear completely – many will simply be downgraded to part-time or contract. That was already happening before the pandemic. We have every reason to believe the trend will accelerate.
Many argue that there are not enough opportunities for millions of people to become self-employed. I completely disagree. As businesses close their doors, opportunities will open for enterprising individuals to start their own businesses to fill the voids.
One advantage every upstart has over the closed businesses is a lack of high fixed costs. Many of the businesses that will fold in the coming months and years will be doing so because of high rents, debt payments, insurance, and payrolls.
As a self-employed person, you’re essentially starting with a clean slate. Unburdened by a high fixed cost structure, you’ll be able to operate profitably in a way that predecessor businesses could not.
There’s another important factor that shouldn’t be ignored. Many will begin part-time businesses to supplement reduced employment arrangements. They may find themselves juggling a part-time business with a part-time job.
More than anything, self-employment requires a change in mindset. Over the past 75 years, Americans have been increasingly educated to take jobs in the corporate and government sectors. Self-employment has declined steadily since. Expect it to make a surprise comeback.
Mindsets change quickly when bank accounts, pantries and refrigerators are empty.
The Great Gig Worker Migration
Already, an estimated 57 million people work in what’s loosely described as the gig economy. It’s a good bet many of those gigs will disappear. But for those who abandon working in the gig economy, they’re already halfway toward at least part-time self-employment. They just have to take that final step forward.
5. Look for Employers to Scale Back on Health Insurance
Employees and office space won’t be the only expenses to get cut in the post-pandemic economy. In an effort to cut expenses wherever possible, expect employers to take a knife to employee benefits. Those benefits account for more than 30% of the average employee’s total payroll costs to their employer.
This will have different repercussions – both good and bad – but mostly bad.
The good news – which really isn’t so good – is that fewer people with health insurance will cause demand for healthcare to decline. In theory at least, that should put downward pressure on the overall cost of both healthcare and health insurance.
The bad news is that millions more will join the ranks of the uninsured. That will force people to either go without medical treatment, or rack up large debts to get it.
The combination of events could help to fuel something resembling legitimate health care reform. But let’s hold that discussion for #7 below.
6. Many Pre-Coronavirus Jobs Won’t Come Back
By the end of April more than 30 million Americans filed for unemployment benefits. There are millions more who have either lost their jobs or their businesses due to the pandemic, but aren’t eligible for benefits. Nobody knows exactly how many people are unemployed, and it seems the government no longer even publishes anything that resembles a reliable unemployment rate.
But one thing that seems pretty certain is that many of the tens of millions of jobs lost won’t be coming back. Sure, the government is providing forgivable loans to small businesses to hire employees back through the Paycheck Protection Program, but what happens when that program runs out, and employers are forced to lay off workers on a more permanent basis?
7. Senior Housing will Enter a Steep Decline
Here’s a grim statistic: 20% of coronavirus deaths in the US are connected to nursing homes. This will almost certainly lead to a decline in the number of people hoping to get family members into nursing homes and related facilities.
In fact, a decline of as much as 50% in senior housing in general has been forecast as a worst-case scenario.
There were already signs that demand for senior housing was declining prior to the pandemic. But the fear fresh over the coronavirus, and a heightened concern about future pandemics, are likely to lead to a rapid decline in the demand for senior housing.
Silver lining: the demand for at-home caretakers is likely to rise substantially in the next few years. That will create both jobs and business opportunities.
8. Americans Will Rediscover Saving Money
This is a good financial habit that never should’ve gone out of style. But with credit so easy to get, and living costs rising steadily over the decades, there hasn’t been much room in many household budgets for savings.
That needs to change, and the pandemic will probably make it happen. Savings – not credit – are the foundation of financial success, a concept that’s soon to be rediscovered.
One of my pandemic observations is that part of the reason why it hit so hard economically is because so many people went into it without savings and with too much debt. Necessity should cause that balance to shift.
9. Long-distance Travel won’t Make a Comeback
Part of the reason will be lingering pandemic fears, including concern over future pandemics. But an even bigger cause is likely to be a prolonged economic downturn. Expect to see businesses make drastic cuts in business travel, in part to cut costs, but also because of the sudden commonality of communication services like Zoom and Skype.
During the lock down, we become acutely aware of the difference between essential and nonessential businesses and occupations. Travel is one of the most nonessential activities there is. Faced with a choice between making a house payment and traveling to the Virgin Islands for vacation, making the house payment is going to win in the vast majority of households.
Still another factor is the current, massive financial troubles being experienced throughout the travel industry. That includes airlines, hotel chains, resort properties, and cruise lines. Many won’t survive and others will downsize, which will drastically reduce the ability to travel.
10. Alternative Energy is “On Hold” for the Foreseeable Future
Alternative energy has been seen for years as being the ultimate solution to reduce dependence on fossil fuels. That’s been going on since the 1970s, and we’ve made relatively little progress on that front since.
For example, at its peak, all-electric vehicles reached just 2.1% of the US auto fleet. Meanwhile, renewable energy accounted for just 10.9% of all electricity generated in the US in 2019. Of that just 7.3% came from much-celebrated wind power, and only 1.8% from the even more revered solar power.
The main obstacle to alternative energy has been cost. Electric cars cost more than gas powered cars, and alternative sources of electricity are more expensive than power generated by fossil fuels.
With the recent collapse in oil prices, the situation unlikely to change. In an economic decline, fossil fuels will remain cheap for the foreseeable future. That won’t bode well for alternative energy sources.
11. We’ll Experience a General Debt Meltdown
When you spend some time considering the number of industries that are either in trouble or likely to be in the very near future, it doesn’t take a crystal ball to predict a debt collapse. Seriously impaired industries include airlines, hotels, other travel related businesses, oil companies, senior living facilities, office and retail buildings and their owners, and alternative energy.
In a general economic decline, it’s also likely we’ll see the consolidation in the number of households, which will reduce the demand for both homeownership and rentals. Already the auto industry is reporting steep declines in sales, and we don’t even need to discuss the plight in the restaurant sector.
Since virtually every industry in the US economy is built largely on a foundation of debt, the likelihood of those obligations being honored is becoming more suspect all the time.
A pandemic recession/depression – we’re not sure which it is yet – is likely to be both more severe and more prolonged than the financial meltdown of a decade ago. That’s not a hard prediction to make since the downturn will affect far more industries than the last recession did.
A federal rescue may be capable of saving one or two industries. But it’s highly unlikely to be able to backstop a dozen or more. Just the fact that they moved in with trillions of dollars in bailouts in a matter of weeks confirms the severity of the situation from the highest levels.
12. America’s Fascination with Incarceration May Finally Come to an End
In #7 we discussed the coming decline in senior housing. That’s likely to extend to any and all institutions where people are essentially on permanent quarantine. That includes the prisons.
There are currently 2.3 million people imprisoned in the US. And while it’s not likely that the American appetite for criminal justice (particularly as it’s fed by the media and government) is likely to subside, it will moderate by necessity. The cold reality is that anywhere that large numbers of people are held in close quarters is a breeding ground for disease and pandemics.
Expect to see either shorter sentences or house arrest/restitution become more common going forward. It’s also likely many non-violent offenders will be released in the coming months and years. The reduction in state revenues as a result of a pandemic recession is likely to force the issue from a financial angle.
13. We’ll Be On-the-lookout for the Next Pandemic for Decades
One of the problems with a ubiquitous crisis like a pandemic is that it remains etched in the memory for a generation or more. For the foreseeable future, people will continue to be on the lookout for either the next pandemic or even a recurrence of the coronavirus itself.
That will make people more cautious on a number of fronts. First, some degree of social distancing is likely to become the norm. That will put a damper on large gatherings, like sporting events and concerts, for a very long time. It’ll also be another factor limiting airline travel, and particularly travel to foreign destinations.
Along the way, we’ll also be vulnerable to scares, both real and imagined. While there’s been a near unshakable faith in the ability of science and technology to overcome all ills, that confidence is now suspect. Even the outbreak of a particularly severe flu season may send the public into voluntary quarantine. That will not only have social consequences, but also economic ones.
14. Prices Will Come Down Across the Board
Given that the demand for most products and services is declining and likely to remain weak for the next few years, one advantage of the pandemic is likely to be lower prices for most of what we consume.
The only way for businesses to maintain cash flow will be to cut prices and attempt to maintain a slice of whatever market share there is. Expect to see falling prices for houses, rents, automobiles, hotel rooms, healthcare services (see below), restaurant meals, utilities, education, and (ironically) travel, among many others.
One of the areas where I see a particularly acute decline in prices is housing, in both house prices and rents. If the number of households contracts, which will be highly likely in a prolonged economic decline, that alone will create the oversupply that will cut prices. But that won’t be the only force affecting housing.
The other is going to be on the supply side. True, it’s likely new construction of houses and apartments will crater. But at the same time, the steady rise in empty office buildings, retail spaces, senior homes, and hotels is going to cry out for re-purposing.
Here’s my prediction: Some of it is likely to be subdivided to provide space for new, small businesses. But the vast majority, particularly senior housing and hotels, are likely to be converted into permanent or even semi-permanent housing units. That will create a generous supply of cheap alternative housing, that will force more traditional housing units to become more affordable.
Why a general price collapse will ultimately be good news
The media, the government, and real estate-related industries of all stripes will cast a price collapse as an unmitigated disaster. The reality is likely to be something very different.
Housing may end up being the leading driver in a general price decline. Should that happen, there will be a real possibility that we’ll finally get sustainable economic growth that will benefit the masses, and enable the rebuilding of the American middle class. Affordable housing will be foundational to that shift. The current trend toward ever more expensive housing is one of the major forces gutting the middle class.
15. We May Finally Get Something that Looks Like Real Healthcare Reform
I’ll admit, this one seems to stretch the imagination. But that’s only because we’ve become conditioned to belief that health care costs move in only one direction – up.
But there are several reasons why that dynamic may be about to reverse in the aftermath of the pandemic:
- The rise in both unemployment and underemployment will cause millions to lose their health insurance, reducing the demand for healthcare at all levels.
- To cut costs, employers will either reduce their health insurance subsidies or eliminate the plans entirely. With millions of even employed workers going without health insurance, downward pressure on prices will be even stronger.
- The prospect of the coronavirus pandemic may cause people to a) take better care of themselves as a way to minimize their vulnerability, and 2) avoid healthcare facilities for fear of infection.
- Millions of unemployed, underemployed, and low-wage workers – who suddenly have no health insurance – may flock to the healthcare exchanges. When they do, they’ll get generous tax subsidies, that will effectively create a pseudo-public health care system.
- The combination of all the above will create tremendous political pressure to finally reform healthcare. That doesn’t mean coming out with a nationalized health insurance plan, but rather removing the government-imposed regulations that have largely caused the healthcare price spiral in the first place.
The decline in health care costs – which I fully admit most people can’t buy into right now – will be just one more component of a general decline in prices. But it’s exactly what we need, not only to recover from the pandemic economic crisis, but also to create real long-term growth for the majority of Americans. After all, until the coronavirus came along, healthcare costs were the biggest problem for most people.
Final Thoughts on Ways the Coronavirus Will Change Life as We Knew It
I’ll admit this list seems gloomy at first glance. But it doesn’t contain much that most other people haven’t already thought of. Only the blind optimists still believe in the “V” shaped economic recovery. Most of the rest of us know we’re facing an uncertain future, even one where the rules will change.
But if we’re going to recover from this pandemic, at least economically, we’re going to have to make a realistic assessment of what’s likely to play out. From there, we’ll need to change our thinking, then adjust our strategies and tactics.
And as you see, not all that I’ve written here has been gloomy. If we can get past the initial economic shock – which we’re already in – then gradually move toward self-employment and saving money, the general decline in prices has the potential to create the first real economic recovery in decades. But before any of that can happen, we’re going to have to let go of the past and embrace an uncertain future. And if you think about it, there really is no alternative.
Can you think of other ways the coronavirus will change life as we knew it?